[DixieDev]

This shouldn't detract too much from your point, but for fighting games the situation is slightly different from most other genres:

Modern fighting games, as well as older ones that have been modded to included this (such as Melee), have a netcode model called "rollback" that can negate network-induced latency on local inputs. The trade-off is that what you see is usually inaccurate until you receive inputs from the remote player's machine.

Despite fighters often requiring fast reaction speeds, this downside is not a big deal granted that the ping is low. The first few frames of many actions are generally quite subtle, enough that they are quite hard to distinguish from each other; it's usually specific keyframes/poses that people will actually be reacting to.

Melee is probably hurt the most though, as movement is extremely fast and very important, and the difference between wavedashing left or right is not masked by subtle animations.